Put myself on stand-by alert Friday expecting to see the March Aussie continue to rally. I also expected thin volume ahead of the long weekend. Now I see on the daily time frame, volume was fairly modest ahead of the pending New Year’s break in trading sessions. Didn’t we all need it? One reason in my experience is the ‘professionals’ don’t want a short position ahead of a break. I mean, think about it for a minute. Especially in a currency! Most of the day’s volume was created across these two 5 minute sessions. Busy little algos, aren’t they!
My point of posting this illustration is to show what a stop-running caper these computer programs create and what the small retail traders like us are up against. Yes, we got a nice short covering rally ahead of the holiday. But first, a clean sweep was made of the shop floor. And it only took ten minutes. My notes show me my earlier planned entry was good. But during this quick sweep I would have been clipped out for a small loss on the long trade. I guess that’s what liquidity is all about.